Former Kentucky Attorney Pleads Guilty for Escape and Role in $550 Million Social Security Disability Fraud Scheme

From the U.S. Department of Justice, Criminal Division:

A former fugitive and social security disability lawyer pleaded guilty in federal court today for his role in scheming to defraud the Social Security Administration (SSA) of more than $550 million, retaliating against an informant and fleeing from the United States.

Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division; Special Agent in Charge Amy S. Hess of the FBI’s Louisville, Kentucky Field Division; Special Agent in Charge Tracey D. Montaño of the IRS Criminal Investigation (IRS-CI) Nashville, Tennessee Field Office and Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Atlanta Regional Office made the announcement.

Eric Christopher Conn, 58, of Pikeville, Kentucky, pleaded guilty before U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky to one count of conspiracy to defraud the United States, one count of conspiracy to escape and one count of conspiracy to retaliate against an informant.  Sentencing is set for Sept. 7 at 1 p.m. ET. 

“At the Department of Justice, a key mission is protecting the federal treasury on behalf of the American people,” said Attorney General Sessions.  “In this case, the defendant’s scheme fraudulently obligated the Social Security Administration to pay over half a billion dollars in lifetime disability benefits, and then he fled the country.  Thanks to the hard work of the FBI, DOJ lawyers, and our partners with the Social Security Administration, the IRS-CI, HHS-OIG, and our allies in Honduras, this criminal plot did not fully succeed. This case shows yet again that to track down criminals and hold them to account, this Department will cross continents and work with authorities around the globe.”

“The SSA-OIG thanks all of our law enforcement partners for their assistance during the investigation of Mr. Conn’s fraud scheme and subsequent efforts to locate and apprehend Mr. Conn,” said SSA-OIG Special Agent in Charge McGill. “Despite his best efforts to escape justice, Mr. Conn is ultimately being held accountable for defrauding SSA and U.S. taxpayers.”

“Eric Conn preyed upon the sick and vulnerable for his personal gain,” said FBI Special Agent in Charge Hess.  “Rather than face the consequences of his crimes, he chose to flee and attempted to hide from those he had betrayed.  Today’s plea will ensure he is now held accountable.”

“When individuals are approved for certain social security benefits, they automatically became entitled to Medicare and Medicaid,” said HHS-OIG Special Agent in Charge Jackson.  “As a result, a large portion of Conn’s fraudulent scheme drained federal health care plans and cheated needy patients out of the limited dollars available for these vital taxpayer-funded programs.”

According to the plea, from October 2004 to December 2017, Conn participated in a scheme with former SSA administrative law judge David Black Daugherty, multiple doctors, including clinical psychologist Alfred Bradley Adkins, and others to submit thousands of falsified medical documents to the SSA to fraudulently obtain disability benefits totaling more than $550 million for thousands of individuals. According to the plea, upon a former SSA employee discovering and providing information about the scheme to federal agents, Conn and former SSA administrative law judge Charlie Paul Andrus conspired and acted to have the former SSA employee terminated in an effort to discredit the employee.  Finally, Conn admitted that after pleading guilty in March 2017, and prior to being sentenced on June 2, 2017, he fled the country with the help of Curtis Lee Wyatt by severing the electronic monitoring device from his ankle and fleeing across the Mexican border.    

Conn was originally charged in April 2016, along with Daugherty and Adkins, in an 18-count indictment with conspiracy to commit mail and wire fraud and other related offenses in connection with the disability fraud scheme.  Conn subsequently pleaded guilty on March 24, 2017, to a two-count information charging him with theft of government money and paying illegal gratuities, and he was sentenced in absentia on July 14, 2017 to 12 years in prison on those charges.  After his flight from the United States, Conn was charged, along with Wyatt, in September 2017, in a seven-count indictment with conspiracy to escape, escape and other related offenses.  On Dec. 5, 2017, Conn was returned to the United States from Honduras after being apprehended by Honduran authorities.  Conn’s plea today is expected to resolve the outstanding charges against him.  In addition to the 12 years in prison Conn is currently serving, he now faces an additional 15 years in prison.  As part of the plea agreement, Conn agreed to recommend to the Court at sentencing that the Court sentence him to the maximum possible sentence, a 15-year sentence, and run that sentence consecutive to the 12-year sentence previously imposed, for a total of 27 years in prison.

Andrus pleaded guilty in June 2016 to a one-count information charging him with conspiracy to retaliate against an informant, and was sentenced Aug. 7, 2017 to six months in prison.  Daugherty pleaded guilty in May 2017 to a two-count information charging him with receiving illegal gratuities, and was sentenced on Aug. 25, 2017, to four years in prison.  Adkins was found guilty following a six-day trial in June 2017 of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud and one count of making false statements, and was sentenced on Sept. 22, 2017, to 25 years in prison.  Wyatt pleaded guilty in March 2018, and is scheduled to be sentenced on June 29.

The SSA-OIG, FBI, IRS-CI and HHS-OIG are investigating the case. Trial Attorneys Dustin M. Davis of the Criminal Division’s Fraud Section and Ann Marie Blaylock and Rebecca Caruso of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case, with previous co-counsel including Assistant U.S. Attorneys Elizabeth G. Wright of the District of Maryland and Trey Alford of the Western District of Missouri as well as Investigative Counsel Kristen M. Warden of the Justice Department’s Office of the Inspector General.

A former fugitive and social security disability lawyer pleaded guilty in federal court today for his role in scheming to defraud the Social Security Administration (SSA) of more than $550 million, retaliating against an informant and fleeing from the United States.

Attorney General Jeff Sessions, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Special Agent in Charge Michael McGill of the Social Security Administration-Office of Inspector General’s (SSA-OIG) Philadelphia Field Division; Special Agent in Charge Amy S. Hess of the FBI’s Louisville, Kentucky Field Division; Special Agent in Charge Tracey D. Montaño of the IRS Criminal Investigation (IRS-CI) Nashville, Tennessee Field Office and Special Agent in Charge Derrick L. Jackson of the U.S. Department of Health and Human Services-Office of Inspector General’s (HHS-OIG) Atlanta Regional Office made the announcement.

Eric Christopher Conn, 58, of Pikeville, Kentucky, pleaded guilty before U.S. District Judge Danny C. Reeves of the Eastern District of Kentucky to one count of conspiracy to defraud the United States, one count of conspiracy to escape and one count of conspiracy to retaliate against an informant.  Sentencing is set for Sept. 7 at 1 p.m. ET. 

“At the Department of Justice, a key mission is protecting the federal treasury on behalf of the American people,” said Attorney General Sessions.  “In this case, the defendant’s scheme fraudulently obligated the Social Security Administration to pay over half a billion dollars in lifetime disability benefits, and then he fled the country.  Thanks to the hard work of the FBI, DOJ lawyers, and our partners with the Social Security Administration, the IRS-CI, HHS-OIG, and our allies in Honduras, this criminal plot did not fully succeed. This case shows yet again that to track down criminals and hold them to account, this Department will cross continents and work with authorities around the globe.”

“The SSA-OIG thanks all of our law enforcement partners for their assistance during the investigation of Mr. Conn’s fraud scheme and subsequent efforts to locate and apprehend Mr. Conn,” said SSA-OIG Special Agent in Charge McGill. “Despite his best efforts to escape justice, Mr. Conn is ultimately being held accountable for defrauding SSA and U.S. taxpayers.”

“Eric Conn preyed upon the sick and vulnerable for his personal gain,” said FBI Special Agent in Charge Hess.  “Rather than face the consequences of his crimes, he chose to flee and attempted to hide from those he had betrayed.  Today’s plea will ensure he is now held accountable.”

“When individuals are approved for certain social security benefits, they automatically became entitled to Medicare and Medicaid,” said HHS-OIG Special Agent in Charge Jackson.  “As a result, a large portion of Conn’s fraudulent scheme drained federal health care plans and cheated needy patients out of the limited dollars available for these vital taxpayer-funded programs.”

According to the plea, from October 2004 to December 2017, Conn participated in a scheme with former SSA administrative law judge David Black Daugherty, multiple doctors, including clinical psychologist Alfred Bradley Adkins, and others to submit thousands of falsified medical documents to the SSA to fraudulently obtain disability benefits totaling more than $550 million for thousands of individuals. According to the plea, upon a former SSA employee discovering and providing information about the scheme to federal agents, Conn and former SSA administrative law judge Charlie Paul Andrus conspired and acted to have the former SSA employee terminated in an effort to discredit the employee.  Finally, Conn admitted that after pleading guilty in March 2017, and prior to being sentenced on June 2, 2017, he fled the country with the help of Curtis Lee Wyatt by severing the electronic monitoring device from his ankle and fleeing across the Mexican border.    

Conn was originally charged in April 2016, along with Daugherty and Adkins, in an 18-count indictment with conspiracy to commit mail and wire fraud and other related offenses in connection with the disability fraud scheme.  Conn subsequently pleaded guilty on March 24, 2017, to a two-count information charging him with theft of government money and paying illegal gratuities, and he was sentenced in absentia on July 14, 2017 to 12 years in prison on those charges.  After his flight from the United States, Conn was charged, along with Wyatt, in September 2017, in a seven-count indictment with conspiracy to escape, escape and other related offenses.  On Dec. 5, 2017, Conn was returned to the United States from Honduras after being apprehended by Honduran authorities.  Conn’s plea today is expected to resolve the outstanding charges against him.  In addition to the 12 years in prison Conn is currently serving, he now faces an additional 15 years in prison.  As part of the plea agreement, Conn agreed to recommend to the Court at sentencing that the Court sentence him to the maximum possible sentence, a 15-year sentence, and run that sentence consecutive to the 12-year sentence previously imposed, for a total of 27 years in prison.

Andrus pleaded guilty in June 2016 to a one-count information charging him with conspiracy to retaliate against an informant, and was sentenced Aug. 7, 2017 to six months in prison.  Daugherty pleaded guilty in May 2017 to a two-count information charging him with receiving illegal gratuities, and was sentenced on Aug. 25, 2017, to four years in prison.  Adkins was found guilty following a six-day trial in June 2017 of one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, one count of wire fraud and one count of making false statements, and was sentenced on Sept. 22, 2017, to 25 years in prison.  Wyatt pleaded guilty in March 2018, and is scheduled to be sentenced on June 29.

The SSA-OIG, FBI, IRS-CI and HHS-OIG are investigating the case. Trial Attorneys Dustin M. Davis of the Criminal Division’s Fraud Section and Ann Marie Blaylock and Rebecca Caruso of the Criminal Division’s Money Laundering and Asset Recovery Section are prosecuting the case, with previous co-counsel including Assistant U.S. Attorneys Elizabeth G. Wright of the District of Maryland and Trey Alford of the Western District of Missouri as well as Investigative Counsel Kristen M. Warden of the Justice Department’s Office of the Inspector General.